TCS Q1 FY27 earnings call: dollar revenue flat, margin dips on wage hikes

Mgmt Guided Margin ImprovementOrder Pipeline DisclosedMgmt Evaded Key QuestionInvestor Communications View source PDF

TCS · price

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AI summary

TCS Q1 FY27 revenue grew 2.2% from last quarter and 13.9% from last year in rupee terms to Rs 72,275 crore, but was flat in dollars at $7.6 billion. Operating margin dropped to 24% from 25.3% due to wage hikes of 170 basis points. Total contract value was strong at $9.5 billion including an $800 million deal with SKF and a ServiceNow partnership. AI services annualized revenue crossed $2.6 billion, up 13.6% from last quarter. Management expects demand to improve in the September quarter across BFSI, manufacturing and life sciences, and margins to recover above 25%.

Likely market impact

Soft quarter on margin pressure from wage hikes, but strong $9.5 billion order book and AI growth signal recovery. Management guides above 25% exit margin.